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New Delhi: The stock market, which is valued at Rs 5 trillion, is expected to grow by 20% this year, driven by government spending and strong corporate earnings, according to market experts.
A recent survey by Bloomberg mentioned that the upcoming budget is likely to boost consumer spending and infrastructure projects, which will benefit businesses.
Over half of the 24 respondents believe that the NSE Nifty 50 Index could rise to 26,000 points by the end of 2024, with some predicting even higher gains.
Both the S&P BSE Sensex and NSE Nifty50 hit record highs in Thursday’s market opening, reflecting the positive trend on Dalal Street. The Sensex opened at a record high of 80,331.48, while the Nifty50 surged to 24,372.15.
This year, the benchmark index has already increased by 12%, reaching a record high. The recent decrease in the majority for the Bharatiya Janata Party led by Prime Minister Narendra Modi in the elections has led investors to focus more on the consumer sector, anticipating the government to implement more populist measures to gain support.
An early monsoon has also positively impacted the outlook for companies involved in crops such as rice, corn, and soybeans.
According to survey respondents, 13 foresee robust earnings growth for Nifty companies, while five feel that the optimism on future earnings is overstated. Bloomberg Intelligence data indicates that analysts estimate an increase of 15.6% in the earnings per share of MSCI India Index’s companies in 2024.
In comparison, Chinese companies are expected to experience a 10% rise in their EPS for the same period.
Investor attention is currently focused on the budget, scheduled for this month, which will outline policy priorities under the new coalition government.
Half of the survey respondents anticipate a combination of incentives to support consumption and continued capital expenditure on infrastructure to be the government’s priority.
A quarter of those surveyed believe that the primary focus will be on capital expenditure. Another quarter thinks that boosting consumer demand will be the top priority.
Overall, respondents generally concur that consumer discretionary stocks have the most promising outlook, with financial and commodities shares also being favoured.
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